A fee charged on the approved overdraft limit, whether or not it is used, for keeping the facility available. It is usually a percentage per year of the limit, sometimes with a minimum, and is charged in addition to interest on the amount drawn.

Is interest charged on the whole overdraft limit?

No. Interest is charged only on the amount drawn, usually calculated daily. The line fee is the part of the cost that applies to the whole limit.

Can a bank reduce or call in a business overdraft?

The contract sets out when the limit can be reduced or the balance called in, and some overdrafts are reviewed every year and repayable on demand, while others can be reduced or called in only after a period of written notice. Under the Banking Code of Practice, a subscribing bank may not need to give notice before requiring repayment of an overdraft or other on-demand facility.

What is the difference between an overdraft and a line of credit?

An overdraft is a limit on the business transaction account itself. A line of credit sits in a separate loan account and is often used for larger working capital facilities, commonly secured by property.

Do business overdrafts need security?

Not always. Unsecured overdrafts are available for smaller limits, generally at higher rates, while secured overdrafts are backed by property or other assets.

Compare Business Overdrafts

A business overdraft lets a business account go below zero up to an agreed limit, with interest charged on the amount used rather than on the whole limit. Compare 33 overdrafts from 23 lenders below on the published interest rate and the main establishment and ongoing fees, sorted on the interest rate, lowest first, and rates start from 7.25% p.a. with Cairns Bank’s Business overdraft (secured).

Rates checked against providers’ own published data on 24 Oct 2026

For business use. These products are for business purposes. If you are borrowing or saving for yourself, or for an investment property you own personally, compare Home Loans, Personal Loans and other personal products instead.

	Establishment fee	Ongoing fee	Actions
Cairns Bank	Interest rate7.25%	Establishment fee$200	Ongoing fee$12Period not stated	OverdraftVariable	An overdraft facility to assist with day to day cash flow, secured by real estate
Australian Mutual Bank	Interest rateFrom 8.05%	Establishment feeFrom $250	Ongoing fee$100 a year	OverdraftVariable	An easy and efficient way to manage your business.
IMB Bank	Interest rate8.09%	Establishment fee0.50% of the limit	Ongoing fee0.25% of the limitPeriod not stated. Plus another ongoing fee in Product Info	OverdraftVariableFeatures: Borrow $2,000 to $500,000	A Secured Business Overdraft works in conjunction with your IMB Business Transaction Account to assist you with the day-to-day working capital requirements of your business
Westpac	Interest rate8.36%	Establishment fee0.60% of the limit (min $600)	Ongoing fee1.20% of the limit a year, charged monthly	OverdraftVariable	Provides cash flow relief with funds to cover business expenses, such as invoices and wages until you?re paid.
Southern Cross Credit Union	Interest rate8.50%	Establishment feeNot stated	Ongoing feeNot stated	OverdraftVariable	Ongoing overdraft facility to access additional funds to manage cash flow and expenses.
Commonwealth Bank	Interest rateFrom 8.60%	Establishment feeNot stated	Ongoing fee1.70% of the limit (rate period not stated), charged monthly	OverdraftVariableFeatures: Borrow from $2,000	Access additional funds directly from your business transaction account, to manage your business cash flow or unexpected expenses.
The Capricornian	Interest rate9.35%	Establishment feeFrom $500	Ongoing feeFrom $5 a month	OverdraftVariable	Take control of your cash flow with a Capricornian business overdraft so you can ride out those unexpected business expenses.
Great Southern Bank	Interest rate9.45%	Establishment fee$750	Ongoing fee$0	OverdraftVariableFeatures: Borrow $20,000 to $250,000	A Great Southern Bank Business overdraft can help you to closely manage your cashflow without compromising your business goals.
Bank of Melbourne	Interest rate10.06%	Establishment fee0.60% of the limit (min $600)	Ongoing fee1.20% of the limit (rate period not stated), charged monthly	OverdraftVariable	Easy access to approved finance to manage everyday business expenses.
BankSA	Interest rate10.06%	Establishment fee0.60% of the limit (min $600)	Ongoing fee1.20% of the limit (rate period not stated), charged monthly	OverdraftVariable	Easy access to approved finance to manage everyday business expenses.
St.George Bank	Interest rate10.06%	Establishment fee0.60% of the limit (min $600)	Ongoing fee1.20% of the limit (rate period not stated), charged monthly	OverdraftVariable	Easy access to approved finance to manage everyday business expenses.
Bank of Melbourne	Interest rate10.06%	Establishment fee$250	Ongoing fee1.20% of the limit (rate period not stated), charged monthly	OverdraftVariable	Obtain a flexible unsecured line of credit with a variable interest rate. If you?re applying for an unsecured commercial overdraft, you must be an existing Bank of Melbourne business customer.
BankSA	Interest rate10.06%	Establishment fee$250	Ongoing fee1.20% of the limit (rate period not stated), charged monthly	OverdraftVariable	Obtain a flexible unsecured line of credit with a variable interest rate. If you?re applying for an unsecured commercial overdraft, you must be an existing BankSA business customer.
St.George Bank	Interest rate10.06%	Establishment fee$250	Ongoing fee1.20% of the limit (rate period not stated), charged monthly	OverdraftVariable	Obtain a flexible unsecured line of credit with a variable interest rate. If you?re applying for an unsecured commercial overdraft, you must be an existing St. George business customer.
RACQ Bank	Interest rate10.21%	Establishment feeNot stated	Ongoing feeNot stated	OverdraftVariable, interest only, investmentFeatures: Borrow from $20,000	Our Business Secured Current Account is an overdraft product for business or investment purposes.
Northern Inland Credit Union	Interest rate10.24%	Establishment feeNot stated	Ongoing fee$8 a month	OverdraftVariableFeatures: Borrow from $2,000	Provides an overdraft account facility for commercial Members, with on call access to savings and a full range of payment services
Great Southern Bank	Interest rate10.35%	Establishment fee$750	Ongoing fee$0	OverdraftVariableFeatures: Borrow $20,000 to $250,000	A Great Southern Bank Business overdraft can help you to closely manage your cashflow without compromising your business goals.
Auswide Bank	Interest rateFrom 10.41%	Establishment fee0.50% of the limit (min $600)	Ongoing feeFrom $10 a month	OverdraftVariable, interest only, investmentFeatures: Borrow $50,000 to $5,000,000LVR up to 80%	A business overdraft with flexibility to draw on your available credit limit, allowing you to manage business cash flow and expenses.
Summerland Bank	Interest rateFrom 10.54%	Establishment fee$800	Ongoing fee$8 a month	OverdraftVariable, principal and interestFeatures: Borrow from $1,000	A line of credit linked to your business account, giving you easy access to funds, up to an agreed amount, to cover your cash flow needs.
NAB	Interest rate10.97%	Establishment fee0.75% of the limit (min $600)	Ongoing fee0.75% of the limit or balance (min $600, rate period not stated), charged monthly	OverdraftVariableFeatures: Borrow from $20,000	Manage peaks and troughs in your cash flow with an overdraft on your transaction account, starting from $20K.

What is a business overdraft?

A business overdraft is a credit limit attached to a business transaction account. The account can go below zero up to the limit, and the balance is repaid as money comes in. It is designed for short-term working capital: the gap between paying suppliers, staff or the ATO and being paid by customers. Some lenders publish secured and unsecured overdrafts as separate products, and each is listed on its own.

These products are for business purposes. Overdrafts and lines of credit for personal use, which some banks file in the same category of their data, are not listed here.

How overdrafts are priced

An overdraft usually costs three things:

Interest on the amount drawn, at a variable rate, generally calculated daily and charged monthly. Money not drawn attracts no interest.
A line fee on the limit, charged whether or not the limit is used, as the cost of keeping the facility available. It is usually quoted as a percentage per year of the limit, sometimes with a minimum dollar amount. On this page, where the lender quotes it as a percentage of the limit, the Ongoing fee column shows the line fee, even if the lender also charges a smaller account or service fee. Every ongoing fee is listed in the product’s details. Where a lender publishes only dollar fees, the column shows the lowest, marked "From" where there is more than one. Where the lender does not say whether a percentage is a yearly rate, the column says the rate period is not stated.
An establishment fee when the overdraft is set up or increased, and on some products an annual review fee.

For example, a $50,000 limit with a line fee of 1.50% a year costs $750 a year in line fees before any interest, so the size of the limit, not only the amount drawn, sets the line fee. These figures are illustrative.

Unsecured overdrafts are available for smaller limits, generally at higher rates than secured ones, which are backed by property or other assets. A business line of credit works in a similar way but sits in a separate loan account, and is listed on the Business Loans page under the Loan type filter.

Reviews and repayment on demand

Overdraft contracts differ on reviews and repayment. Some overdrafts are reviewed each year and are repayable on demand, and others let the lender reduce the limit or require repayment only after a period of written notice, such as 90 days. Under the Banking Code of Practice, a subscribing bank gives a small business at least 30 days’ notice of a missed payment on a loan before enforcing it, but the code says that for an overdraft or other on-demand facility the bank may not need to give notice before requiring repayment. The contract’s own notice terms set out which applies.

How to compare business overdrafts

The interest rate and the line fee work together: a lower rate with a higher line fee can cost more for a business that keeps a large limit and draws little of it, and less for one that uses most of it. Each product’s details set out how the line fee is worked out, as a percentage or a flat amount, and any minimum, where the lender publishes it. Overdrafts rarely publish a comparison rate.

The guide to business loans and overdrafts has a worked example of a year’s overdraft cost, and the guide to business transaction accounts covers the account an overdraft is usually attached to. Current accounts are compared on the Business Transaction Accounts page.

CompareThat is a comparison service, not a lender or broker. This page is general information only, not credit or financial advice, and we do not compare every business overdraft available in Australia. The lender’s own terms, fees and eligibility criteria set out what it offers.

Glossary

The key terms you’ll meet when comparing these products, reading product disclosures or talking to a provider.

Term	What it means
Overdraft	A credit limit on a transaction account that lets the balance go below zero, up to the limit.
Overdraft limit	The maximum amount the account can be overdrawn, on which the line fee is usually charged.
Line fee	A fee charged on the whole approved limit of an overdraft or facility, whether or not it is used.
Secured overdraft	An overdraft backed by property or other assets, generally at a lower rate than an unsecured one.
Unsecured overdraft	An overdraft with no asset as security, usually for a smaller limit at a higher rate.
Repayable on demand	A facility the lender can require to be repaid when it asks, rather than on a set schedule.
Annual review	A yearly reassessment of a facility, at which the lender can renew, change or reduce it under the contract.

Term

What it means

Overdraft

A credit limit on a transaction account that lets the balance go below zero, up to the limit.

Overdraft limit

The maximum amount the account can be overdrawn, on which the line fee is usually charged.

Line fee

A fee charged on the whole approved limit of an overdraft or facility, whether or not it is used.

Secured overdraft

An overdraft backed by property or other assets, generally at a lower rate than an unsecured one.

Unsecured overdraft

An overdraft with no asset as security, usually for a smaller limit at a higher rate.

Repayable on demand

A facility the lender can require to be repaid when it asks, rather than on a set schedule.

Annual review

A yearly reassessment of a facility, at which the lender can renew, change or reduce it under the contract.

Common questions

Rates and fees are sourced from each provider’s CDR Product Reference Data as of the date shown. They are general information only. Not credit advice. CompareThat is not a credit provider. Payment can change where a product appears, never which products we show.